Global | Grid, Baby, Grid

Summary

Electricity grids are becoming a global bottleneck to the energy transition. Without faster, anticipatory investment, renewables and electrification will not reach their full potential. Digitalisation and storage help, but cannot substitute for grid expansion.

Key points

• Key points:
• Grid investment lags clean generation: Renewable capacity has grown much faster than network spending, resulting in congestion, curtailment, rising system costs and delayed electrification.
• Bottlenecks dominate: Planning fragmentation, lengthy permitting and regulatory frameworks designed to minimise stranded-asset risk—rather than enable expansion—have become the main constraints.
• Technology is complementary, not substitutive: Digitalisation, AI, grid-enhancing technologies and storage improve efficiency and flexibility, but cannot offset structural network undercapacity.
• US–EU contrast, shared challenge: The US struggles with fragmented federal–state coordination and cost allocation; the EU with execution and cross-border alignment. Both face growing grid stress.
• Spain: Distribution grid saturation and renewable energy curtailment are consistent with a pattern of underinvestment that can be associated with planning approaches designed for a different economic environment, prioritising stranded-asset risk minimisation and cost containment over expansion. Addressing this tension may require rethinking how grid investment risk is shared and assessed.

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